THE SHAW CASE.

Press, Volume L, Issue 14902, 16 February 1914, Page 10

THE SHAW CASE.

THE KECENT JUDGMENT.

AEGUMEXT AS TO COSTS,

The recent judgment in the case of the Official Assignee in the estate of Walter Shaw, against the Timaru Property Co. came before his Honour Mr Justice Denniston in Chambers ou Saturday morning.

There were two summonses to remove caveats from titles to properties involved in the action, and a motion to fix costs.

Mr Woston appeared for the Official Assignee, Mr \v. V. -Uacuregor, W.J. A. Cassidy, and Mr \V. l>. Lunipbetl tor tho defendants, except Trerurita, and Mr H. J>. Aciand for Trevurza.

Mr Alacyrejior eaid that the caveats were lodged in September, IUI3. Shortly alter summonses were issued for the removal of the caveats, but later on an agreement was entered into between tho parties, to abide by tho decision of the Court in the action.

Mr Weston eaid he "was instructed to ask practically for a stay of proceedings, to allow the Official Assignee to consult the creditors. His Honour: Have they not had time V

Mr West on: Judgment was only delivered on Saturday last.

His Honour: The question to be considered is that of appealing ?

Mr Westou: Yes, aud to consider the whole question.

Hits Honour: All you have to consider is the question of-appeal.

Mr Westou: Yes. His Honour: Assuming you do appeal, what your position:"

Mr Weston: The cavoaLs should stand. The Official Assignee is quite drilling to facilitate every dealing with tho property, provided precautions are taken to protect the interests of the creditors.

His Honour: Suppose you have an offer for-the whole of the property you would ask for some conditions regarding the purchase money.

Mr Weston: . Yes. wo would ask that the purchase money should be deposited with the Public Trustee.

Mr Macjzrt'gbr said the present application was a distinct breach of tho agreement that the parties would abide by the decision of the Court, as> governing tho caveats.

After further discussion, his Honour said he did ?iot think the parties should havo gone to law until they had absolutely exhausted a proposal made for the disposal of the property. However, that was not very relevant.

Mr Maogregor argued that by virtue of the agreement between the parties the present application was barred. Even ii no agreement had been entered into it was unfair and harrassing and ruinous to the company to have the matter dealt with now. The. properties were not the Official Assignee's, but Trevuraa's, and Trevurza was not a bankrupt. The Official Assignee took -no steps to save the- action. If the Official Assignee had done what'he reasonably should havo done when he became aware of the agreement with the Timaru Property Company he would have called the parties together. The Official Assignee nevei asked one person to coino before him and give an explanation as it was in his power and his duty to do. Instead of.that, he waited for six months before he brought the action. The position was that the company was stopped from dealing with f?te properties, while the caveats continued. At present there were ten or cloven overdue mortgagee, in respect of which the mortgagees were pressing for the money. At. present, tho mortgages could neither be renewed nor paid ■while tho caveats continued. The company would have to go out of existence if the caveats were not lifted, for they could not finance. Did Mr Weston _ argue that there was a serious I possibility of an appeal? 1 Mr Weston : I cannot tell.

Mr Mucgregor: This question is more vital-to the company than that of costs. Mr Weston said that for the future no. costs would be asked for by the Official Assignee in respect of anything he did to fncilitate dealings with tn« property. Consent would be given to any transfers. His Honour: Conditionally. Mr Weston : Yes, if money is received we would ask that it be kept in trust until the appeal is settled. If no money is received, tho transactions would not be held up. His Honour: You would have a controlling hand? Mr Weston: Only of the clear proceeds. Mr Weston said that, if the company were willing, he would leave it to Mr Rolleston or Mr Ktuibley to say what were, fair terms for the protection ot tho company. Mr Macgregor: I don't understand.

-His Honour: I understand. The proposal is to appoint an impartial person to. say what is the proper courso to.be if the caveats'stand. Is there any. suggestion that an attempt will bo made to sell the properties en bloc ■ any suggestion that the company will do , anything:* ' "' " ■ * . Mr Macgregor: To make away with its assete. Hie Honour: I did not put it as emphatically as that. Mr Macgregor: I do not think that even Mr Weston suggests that. I will give any undertaking'to meet that suggestion. His Honour: What kind of undertaking? Mr Macgregor: All we want is tho right to gi». on with our business. His Honour said he would make an order removing the caveats, subject, however, to the right of the Official Assignee to caveat again, in the case of special circumstances. COSTS. The matter of the costs of the action was then taken. Mr Macgregor applied for full costs. He claimed that the defendants were fairly entitled to them. The action should never have been brought, for the Oiiicial Assignee should first have exhausted every other source of information.' and made exhaustive enquiries as to the facts. If he had done that, and taken any of the steps provided by the Bankruptcy Act. the action would not have been brought. In reply to his Honour. Mr Mcgregor said that, as far as his figures went the costs would amount to about £400. The hearing of the application was adjourned. The matter was disenssed again later in the day. Mr Macgregor claimed that the Court should certify for all tho costs involved in the action. The case was a most expensive one. and should be treated as one heard from a distance. The hearing of the case occupied several days, the amount involved was very largej and required extensive preparatory work, and charges tvero involved concerning the reputation of a

number .ot —individuals which, of -necessity, involved the greatest care* preparing the case for trial. There was also the delay in bringing the action. Mr Weston saidtthatt t on the basis of £15.100. if taken to be the amount involved in the action, the cost of trial for the first day was £363. It was not lair to blame the Official Assignee entirely for the • action. An effort was made .in May last to obtain information. ■ ~ , His Honour said the otler of the defendants to surrender their rights, on being reimbursed, was a fair offer. Mr Weston said the defendants insisted on being given a clean sheet as it were. ■ ~ His Honour said the plaintiffs treated the other partios as persons who should account to them. ■ Mr Weston said the Official Assignee should not be blamed lor the action. Tho costs, if the limit were exceeded, would be 60 heavy as to crush the estate entirely. -If a certificate were piven £he Official Assignees liability should be limited to the moneys in his hands after paying preferential claim*. His Honour said the Official Assignee was indemnified. Mr Weston pointed out that the extra days and the heavy disbursements would add largely to the costs. 'lhe basis of. tLe costs had not been fixed. Regarding the alleged dolav, he would point out that the Official Assignee had to depend to a large extent on Shaw's evidence, and that took some time to get. ' Mr Macgregor said that the evidence of all parties, and not Shaw's only, was required. Xα attempt at investigation was made except in the action. On the amount involved in the case. Mr Macgregor said it should be taken at £15.100.

?vu- Aciand quoted from the statement oT claim to show that the amount should be £17,000 or £18.000.

Mr Weston claimed that the amount should be £7."00, that being the sum mentioned in the agreement. According to that, the solicitor's fee on trial would bo £200. J\[r Ivlacgregor claimed costs tor the extra days of the trial. There, were really six extra days. Mr MacgVegor aWo "claimed for extra counsel, ami tor a certificate tor the coste of an affidavit of discovery by the defendant company. The affidavit involved a large amount of research, and took three days to prepare. Tho expense of procuring the affidavit could have been avoided if the Official Assignee had obtained the Information from the parties before hand. Mr Macgregor ak-o asked for £10 10a for the production of documents. He also applied for certiticates for costs for the inspection of the defendente' documents, and an affidavit of discovery by tho three defendants. He ;j.iso asked that the expenses of witnesses, for qualifying snould be allowed. Mr Acland asked for similar certificates applied for by Mr Macgregor with the addition of a certificate tor a summons for discovery by Trevurza. Mr Weeton asked the Court to fix a limit. Even if investigations were made, the action would still be necesea'rv.

ilis Honour: Surely you should have counted the cost when the action was such an expensive one. It was very speculative from many points of view. Mr Weston: The question of costs should not prevent a man from endeavouring to get what he honestly thinks he is entitled to.

Mr Weston pointed out that on a basis of £15,100 as the mount involved, counsel's fee alone on the two sets of costs would be £960. Then there would be the extra costs, of certificates. The action was forced on all parties. His Honour: Who forced it? Mr Weston: I cannot express an opinion on that. Mr Weston asked the Court to fix: £400 as the sum for costs in respect of the Property Company, together with disbursements. He did not think that Trovurza was entitled to much consideration in the way .of costs, for Trevtirza's action brought about the trouble. ,

His Honour said the reason for bringing the action was a. charge of fraud against the .other .parties. The plaintiffs had failed, and, having sown the wind, were now reaping the whirlwind. Mr Weston: I am certainly reaping the whirlwind. His Honour: Yes, it's a very hard case. Decision was reserved.